Working in partnership to set up a municipal energy supply company. Reg Platt, Senior Partnerships Manager

Transcription

1 Working in partnership to set up a municipal energy supply company Reg Platt, Senior Partnerships Manager

2 Agenda 1. Who is OVO? 2. Why set up a municipal energy supply company? 3. How is it done?

3 Who am I? From ideas to practice

4 Who is OVO? We supply energy with a market leading combination of highly competitive prices and exceptional customer service Npower British Gas Extra Energy* Sainsbury s Green Star* EDF Scottish Power SSE E.ON Flow Energy* Spark Marks & Spencer First Utility Co-op OVO Utility Warehouse Good Energy EBICO Ecotricity 21 15% 25% 35% 45% 55% 65% 75% 85% Which? customer satisfaction score * New entrant; no satisfaction score available Sources: Which? Energy Satisfaction Survey 2014, EnergyLinx 16 th September 2014

5 Who is OVO? Independent? Yes. Small? No. Launched in 2009, have c.420,000 customers and growing. Targeting 1 million customers by Just another energy company? No. Our mission: to be the UK s most trusted energy supplier Our DNA: a technology company, not a utility company. Our inception: surely energy can be done better!

6 Agenda 1. Who is OVO? 2. Why set up a municipal energy supply company? 3. How is it done?

7 The reign of the Big 6 is under threat the market is opening up Othe rs 20% 0% 0% Othe rs 3% 0% Othe rs 9% 0% 0% Big 6 80% 2020? Othe 0% rs 1% Big 6 97% Big 6 91% Summer 2013 Autumn 2014 Charts show energy supplier domestic market share Big

8 Why set up a municipal energy supplier? 5 reasons:

9 Why set up a municipal energy supplier? 5 reasons: 1. Ensure people and businesses pay a fair price for their energy; tackle fuel poverty

10 Why set up a municipal energy supplier? 5 reasons: 1. Ensure people and businesses pay a fair price for their energy; tackle fuel poverty 2. Integrate other energy activities (e.g. energy efficiency, renewable generation and community energy) to maximise their value

11 Why set up a municipal energy supplier? 5 reasons: 1. Ensure people and businesses pay a fair price for their energy; tackle fuel poverty 2. Integrate other energy activities (e.g. energy efficiency, renewable generation and community energy) to maximise their value 3. It is self-financing, and potentially income generating

12 Why set up a municipal energy supplier? 5 reasons: 1. Ensure people and businesses pay a fair price for their energy; tackle fuel poverty 2. Integrate other energy activities (e.g. energy efficiency, renewable generation and community energy) to maximise their value 3. It is self-financing, and potentially income generating 4. Be positioned for new opportunities as smart and decentralised energy grows the future is local

13 Why set up a municipal energy supplier? 5 reasons: 1. Ensure people and businesses pay a fair price for their energy; tackle fuel poverty 2. Integrate other energy activities (e.g. energy efficiency, renewable generation and community energy) to maximise their value 3. It is self-financing, and potentially income generating 4. Be positioned for new opportunities as smart and decentralised energy grows the future is local 5. Nothing is stopping you and there is a lot riding in your favour

14 The first big opportunity Councils have assets to leverage that can generate competitive advantage and help the most needy Around two thirds of households are sticky, don t switch, and are often paying xxxs above the cheapest prices This includes high %s of households on low incomes and in social housing [CATEGO RY NAME] [CATEGO RY NAME] [CATEGO RY NAME] Energy efficiency schemes show local councils can reach customers where energy companies can t - because they are trusted [CATEGO RY NAME] Councils and social landlords can also reach customers through new touch points

15 Agenda 1. Who is OVO? 2. Why set up a local energy supplier? 3. How is it done?

16 How is it done? Licence Lite White label Fully licensed supplier

17 How is it done? White label OVO Communitie s Licence Lite Fully licensed supplier Council builds an energy supplier using OVO s supply licence and back office functions Think Amazon s retail platform model applied to energy

18 An OVO Communities partnership OVO Supply licence Customer service Billing Wholesale trading, PPA management and balancing Bad debt Regulatory compliance Industry settlements Council Partner Strategy Pricing Tariff design: standing charges; generation mix Customer acquisition Source local generation Negotiate PPAs All customer facing services branded as Community Partner (or co-branded) All OVO services provided at cost +3% margin Partner incurs no set-up costs

19 An OVO Communities partnership OVO Supply licence Customer service Billing Wholesale trading, PPA management and balancing Bad debt Regulatory compliance Industry settlements Council Partner Strategy Pricing Tariff design: standing charges; generation mix Customer acquisition Source local generation Negotiate PPAs Both parties are similarly incentivised to make the business a success We only get paid if our partners business

20 What we would provide to our partners: Our partners get access to: 1. Our highly efficient and scalable operations enabling them to offer highly competitive tariffs for consumers and businesses 2. Our ECO funding 3. Our state of the art smart meter technology and data that is produced 4. Our market leading Pay As You Go tariffs 5. Our capabilities in delivering Power Purchase Agreements 6. The ability to offer crowd funding opportunities to local customers

21 OVO has the cheapest Pay As You Go tariff for average consumers in every region of the UK

22 Opportunities for developing local generation Route to market: Sign power purchase agreements and give local developments a secure route to market at fair prices Roof top solar: Spread the bill savings from installations across your customer base Crowdsourcing: Offer your customers investment opportunities in local generation through our platform Onshore wind: Reward customers for supporting developments through their bills

23 The model has been design to suit local needs: We will only partner with organisations set up to deliver community benefit: i.e. Local Authorities, Housing Associations and community groups The platform is fully customisable

24 We can work with different approaches to procurement as our first partnerships show Our first partners: A community energy organisation set up by a council Council, soon to be announced Won through an OJEU tender A community energy group with council backing

25 What s in it for OVO?

26 This is just the beginning

27 Thank you OVO Communities website: Reg Platt OVO Communities